If you're thinking of selling your business, either by yourself or with the aid of a broker, it's likely that your accountant will be one of the first people you turn to for advice. If you've used an accountant regularly to prepare your tax returns and draw up financial statements, he or she will be very well acquainted with the financials of your business. The accountant, by simply deleting   add backs from the spreadsheet used in your tax returns, will produce what is commonly known as an "abridged Profit & Loss". Add backs are such things as depreciation, interest repayments on debt, one off extraordinary expenses, lease payments on equipment which are to be paid out and many other items are seen as add backs.

The "profit and loss statement, (Abridged)", also referred to as a "Income Statement" "statement of incomes and losses," or "report of earnings," tells you and your potential buyer:

• The income the business has earned in the accounting period
• The costs or expenses that were incurred by the business during the period
• Your net profit — the difference between the costs and income for the period

Two to three years' worth of income-statement data are normally presented, so that the potential purchaser can make comparisons and identify trends. One year is the minimum that will be required.

Your accountant will also be essential in drawing up the historical and projected financial statements and other data required to place a proper value on your business, and in gathering and organizing financial data requested by the buyer during the due diligence phase of negotiations. (Due Diligence)